Slide 1: Q4 2022 Financial Results
Q4 2022 FINANCIAL RESULTS JANUARY 27, 2023 SIMPLE IDEAS. POWERFUL RESULTS.
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The information provided in this presentation contains forward-looking statements within the meaning of the federal securities laws. These forward- looking statements may include, among others, statements regarding operating results, the success of our internal operating plans,
Slide 3: Reg. G Disclosure
REG. G DISCLOSURE Today’s Conference Call Will Discuss Results Primarily on an Adjusted (Non-GAAP) and Continuing Operations Basis. Q4 Results are Adjusted for the Following Items: (1) Acquisition-Related Intangible Amortization Expense (2) Purchase Accounting Adjustments to Commission Expense (3) L
Slide 4: Roper Conference Call
ROPER CONFERENCE CALL • Q4 and 2022 Enterprise Highlights & Financial Results • 2022 Segment Detail & 2023 Outlook • 2023 Enterprise Guidance • Q&A PAGE 4
Slide 5: Roper Entering 2023
ROPER ENTERING 2023 Strong 2022 • Roper Delivered Another Great Year; +11% Revenue, +9% Organic Revenue, +12% EBITDA • Concluded Multi-Year Divestiture Activities; Enhanced Quality and Reduced Cyclicality • Deployed $4.3B Toward Acquisitions of High-Quality Vertical Software Businesses Durable Tailw
Slide 6: Q4 Financial Highlights
Q4 FINANCIAL HIGHLIGHTS • Revenue +14%; Organic Revenue +7% • EBITDA +17%; EBITDA Margin +110 Bps to 41.4% • DEPS +17% to $3.92 • Free Cash Flow (8)% to $457M; (3)% Excluding Cash Tax Impact of Section 174* REVENUE EBITDA FREE CASH FLOW +15% +17% Sec. 174 3-Year 3-Year +11% CAGR CAGR 3-Year CAGR $92
Slide 7: Q4 Segment Results
Q4 SEGMENT RESULTS APPLICATION SOFTWARE NETWORK SOFTWARE TECHNOLOGY ENABLED PRODUCTS REVENUE REVENUE REVENUE +22% +9% +4% vs PY vs PY vs PY _____ _____ _____ +7% +9% +5% Organic Organic Organic $396 $550 $605 $740 $262 $283 $323 $350 $271 $283 $329 $341 Q4'19 Q4'20 Q4'21 Q4'22 Q4'19 Q4'20 Q4'21 Q4'2
Slide 8: 2022 Financial Highlights
2022 FINANCIAL HIGHLIGHTS • Revenue +11%; Organic Revenue +9% • EBITDA +12%; EBITDA Margin +20 Bps to 40.4% • DEPS +15% to $14.28 • Free Cash Flow (7)% to $1.49B; (1)% Excluding Cash Tax Impact of Section 174* REVENUE EBITDA FREE CASH FLOW Sec. 174 +15% +17% 3-Year 3-Year +15% CAGR CAGR 3-Year CAGR
Slide 9: Strong Financial Position
STRONG FINANCIAL POSITION • Completed Majority Sale of Industrial Businesses on November 22nd – After-Tax Proceeds of $2.3B; Cash Taxes Paid in Q4 – Roper Now Holds a Minority Interest in New Standalone Industrial Entity Named Indicor – Fair Value Accounting Beginning in Q1’23; Excluded from Guidanc
Slide 10: Segment Detail & Outlook
SEGMENT DETAIL & OUTLOOK
Slide 11: Application Software
APPLICATION SOFTWARE REVENUE FY 2022 HIGHLIGHTS +11% • +7% Organic Revenue Growth vs PY _____ • Growth Accelerated at Vertafore Led by Enterprise +7% Customers; Bolt-On Acquisitions Performing Well Organic • Continued SaaS Adoption at Deltek and Aderant from New Customer Adds and Existing Customer M
Slide 12: Network Software
NETWORK SOFTWARE REVENUE FY 2022 HIGHLIGHTS +13% • +13% Organic Revenue Growth vs PY _____ • Exceptional Growth Year for Freight Matching Businesses +13% (DAT and Loadlink); Premium Offerings Drove Increased Organic Value for Network Subscribers • Strong Renewals and Expansions Combined with New $89
Slide 13: Technology Enabled Products
TECHNOLOGY ENABLED PRODUCTS REVENUE FY 2022 HIGHLIGHTS +9% • +10% Organic Revenue Growth vs PY _____ • Leverage Improved Through the Year Driven by Pricing and +10% Organic Supply Chain Improvements • Another Excellent Year for Neptune; Record Revenue, Orders, and Backlog; Share Gains and Strong Ado
Slide 14: 2023 Enterprise Guidance
2023 ENTERPRISE GUIDANCE
Slide 15: Establishing 2023 Guidance
ESTABLISHING 2023 GUIDANCE • Full Year Adjusted DEPS: $15.90 - $16.20 – Organic Revenue Growth: +5 - 6% – Tax Rate: 21 - 22% • Q1 Adjusted DEPS: $3.80 - $3.84 Guidance excludes impact of unannounced future acquisitions or divestitures. Guidance presented on an Adjusted (Non-GAAP) and continuing oper
Slide 16: Year End Summary
YEAR END SUMMARY Another Great Year for Roper – Revenue +11%; Organic Revenue +9%; Double-Digit Software Recurring Revenue Growth – EBITDA +12%; EBITDA Margin +20 Bps to 40.4% Meaningfully Enhanced Portfolio Quality – Concluded Multi-Year Divestiture Activities – Deployed $4.3B Toward Acquisitions o
Slide 17: Appendix
APPENDIX
Slide 18: Q4 Income Statement Metrics
Q4 INCOME STATEMENT METRICS Q4’21 Q4’22 Revenue $1,257 $1,431 +14%; Organic +7% Gross Profit $880 $1,002 Gross Margin 70.1% 70.0% EBITDA $506 $592 +17% EBITDA Margin 40.3% 41.4% Interest Expense $56 $54 Tax Rate 18.2% 20.3% Net Earnings $359 $419 +17% DEPS $3.36 $3.92 +17% In $ millions, except DEPS
Slide 19: Full Year Income Statement Metrics
FULL YEAR INCOME STATEMENT METRICS 2021 2022 Revenue $4,835 $5,372 +11%; Organic +9% Gross Profit $3,409 $3,753 Gross Margin 70.5% 69.9% EBITDA $1,944 $2,170 +12% EBITDA Margin 40.2% 40.4% Interest Expense $234 $192 Tax Rate 20.5% 20.9% Net Earnings $1,319 $1,525 +16% DEPS $12.39 $14.28 +15% In $ mi
Slide 20: Roper's Revenue Composition
ROPER’S REVENUE COMPOSITION Application Technology Revenue Network Software Roper Total Software Enabled Products Q4’21 Q4’22 Q4’21 Q4’22 Q4’21 Q4’22 Q4’21 Q4’22 Software Related Recurring $436 $556 $225 $252 $2 $3 $663 $811 Reoccurring $29 $34 $63 $62 - - $92 $96 Non-Recurring $141 $150 $35 $37 - -
Slide 21: Reconciliations I
RECONCILIATIONS I Adjusted Revenue, Gross Profit, and EBITDA Reconciliation ($M) (From Continuing Operations) Q4 2019* Q4 2020 Q4 2021 Q4 2022 V% to '21 3-Year CAGR FY 2019* FY 2020 FY 2021 FY 2022 V% to '21 3-Year CAGR GAAP Revenue $ 924 $ 1,111 $ 1,257 $ 1,431 $ 3,558 $ 4,022 $ 4,834 $ 5,372 Purch
Slide 22: Reconciliations II
RECONCILIATIONS II Adjusted Revenue Growth Reconciliation (From Continuing Operations) Technology Q4 2022 Application Network Enabled Software Software Products Roper Organic 7% 9% 5% 7% Acquisitions/Divestitures 17% 1% - 8% Foreign Exchange (2%) (2%) (1%) (2%) Total Adjusted Revenue Growth 22% 9% 4
Slide 23: Reconciliations III
RECONCILIATIONS III Adjusted Revenue Growth Reconciliation (From Continuing Operations) Technology FY 2022 Application Network Enabled Software Software Products Roper Organic 7% 13% 10% 9% Acquisitions/Divestitures 5% 1% - 3% Foreign Exchange (1%) (1%) (1%) (1%) Total Adjusted Revenue Growth 11% 13
Slide 24: Reconciliations IV
RECONCILIATIONS IV Adjusted Net Earnings Reconciliation ($M) (From Continuing Operations) Q4 2021 Q4 2022 V% FY 2021 FY 2022 V% GAAP Net Earnings $ 167 $ 247 48% $ 805 $ 986 22% Purchase accounting adjustment to acquired deferred revenue and commission expense (1) (1) A (4) (4) A Transaction-related
Slide 25: Reconciliations V
RECONCILIATIONS V Forecasted Adjusted DEPS Reconciliation (From Continuing Operations) Q1 2023 FY 2023 Low End High End Low End High End GAAP DEPS E $ 2.54 $ 2.58 $ 10.92 $ 11.22 D Amortization of acquisition-related intangible assets 1.26 1.26 4.98 4.98 Financial impacts associated with the minorit
Slide 26: Footnotes
FOOTNOTES A. Acquisition-related fair value adjustments to commission expense related to the acquisition of Vertafore. These adjustments are taxed at 21%. B. Transaction-related expenses for the Frontline and viGlobal acquisitions. This adjustment is taxed at 21%. C. Related to the Berall legal sett
Slide 27: Roper Technologies
Roper TECHNOLOGIES